More companies signed up at the Dubai International Financial Centre last year than in any previous year in its history.
The emirate’s financial hub sees no reason why its growth strategy should be derailed by current volatility in global markets, Essa Kazim, the DIFC governor said yesterday.
DIFC’s operating review for 2015 showed a 27 per cent rise in new memberships, a record increase for the 11-year-old centre. There are now 1,445 registered companies in DIFC. They employ just short of 20,000 people, 11 per cent up on 2014.
Commenting on the performance in light of current financial market downturns, Mr Kazim said: “There will always be business cycles, booms and recessions. We are not immune to short-term fluctuations, but our strategy will always be long term. We have a backlog of people wanting to be in DIFC, so hopefully this year we can achieve what we did last year.”
The DIFC is also a major property developer. This year, it will start the next major phase of expansion when the Spine project gets under way, with completion expected in 2017.
The Spine is a Dh350 million development to link the current Gate complex with other areas in DIFC jurisdiction, with commercial, retail and leisure facilities running the length of the DIFC. “We’re considering construction tenders, and a major launch announcement will be made in the next few months,” said Brett Schafer, chief executive of DIFC’s property arm.
He added that existing DIFC-owned facilities were 99 per cent let. Work has already begun on another big project, the Dh200m extension to Gate Village.
Mr Kazim said DIFC’s cash position was positive, with earnings in the region of $120m to $140m and cash reserves of about Dh1 billion.
The growth in 2015 was a result of the DIFC’s continued focus on the “South South strategy” by which the centre connects financial businesses in Asia, the Middle East and the rest of the world. “With the Middle East and South Asia expected to account for a substantial share of global economic growth over the next decade, DIFC is well positioned to benefit from the trade and investment flows entering the region from the emergence of the South-South economic corridor linking Asia, Africa and Latin America,” Mr Kazim said.
The South-South strategy is regarded as the main driver of growth over the next decade, in which DIFC aims to reach 50,000 employees by 2024.
Currently, 46 per cent of DIFC members come from the traditional markets of the US and Europe, and 34 per cent from the Middle East. Only 11 per cent are from Asia.
Arif Amiri, the DIFC’s new chief executive, is leading a DIFC delegation to China next month to explore new opportunities there. DIFC already has the four biggest Chinese banks as members, but is aiming at widening the range of Chinese institutions and increasing the business of those already there.
Mr Kazim said there was no sign of a slowdown in business as a result of regional security concerns and the low oil price. “We are looking very healthy, there is an impressive pipeline of business. We are building for the next generation,” he added.
New members in 2015 included Lloyd’s of London, the insurance business, BankMed from Lebanon, as well as the South Korean law firm Bae, Kim and Lee.
The first bank from the Philippines, BDO Unibank, and Nigeria’s Access Bank also joined.
The financial sector was increasingly important for the UAE last year, accounting for 12 per cent of GDP and growing. Mr Kazim said the Abu Dhabi Global Market, the capital’s new financial free zone, would enhance the government strategy of diversifying away from oil dependency. “We [DIFC and ADGM] are complementary for each other, and will help create a cluster of financial businesses in the UAE,” he added.
The DIFC has signed an initial agreement with the telecoms company du to offer a new pricing structure to members, with possible savings of up to 50 per cent on data and communications bills.
Follow The National’s Business section on Twitter